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interest from petitioner, Jack Ham sold it to his nephew for
$334.50 and claimed a loss for tax purposes. At trial, Harris, a
commercial loan officer at Commerce Bank, testified that after
considering petitioner's interest expense, he thought
petitioner's oil partnership interest was worth a negative
amount. Hooker, who was a limited partner himself, testified
that he thought the price petitioner received was high in
relation to the value. Moreover, all the original investors in
the oil partnership lost money because the oil production
drastically dropped, and investors could not find buyers to whom
they could sell their interests. Finally, petitioner admitted to
IRS Agent McGehee that he thought he would lose his entire
investment because the well was dry. Thus, by structuring a
transaction where he would receive $38,334.50 for an oil
partnership interest that was worth little or nothing, petitioner
purposefully intended to conceal his receipt of the kickbacks.
We note that petitioner's education and sophistication are
also relevant to the determination of fraud. See Blunt v.
Commissioner, T.C. Memo. 1966-280 (fraud addition imposed on
former mayor whose activity in business and civic affairs gave
him the requisite sophistication to commit fraud); see also
Halle v. Commissioner, 175 F.2d 500, 503 (2d Cir. 1949), affg. 7
T.C. 245 (1946). Petitioner was a career politician. During his
career, he held office as a State legislator and U.S.
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